09 Dec Compliance procedures of Representative offices in Vietnam
All representative offices are always busy with compliance procedures in the last months of the year. In the first quarter of 2021, there will be a lot of compliance reports and procedures that must be completed. Each type of representative office compliance procedures should be prepared from early December of 2020 to avoid missing deadlines as well as penalties from the competent state agencies.
A. COMPLIANCE PROCEDURES FOR TAX – ACCOUNTING
1/ Compulsory tasks:
- Settlement of personal income tax for representative office (the income payer).
- Settlement of personal income tax for individuals having multiple incomes or direct incomes from abroad.
- Double-check to issue withhold tax receipts and letter of confirmation of incomes for the resigned employees.
2/ Other important tasks
- Cashbook and petty cash preparation, collect and organize all related documents and invoices for tax inspection in the following years.
- Double-check for tax declaration – payment with proper reports and receipts.
- Double-check for the balance – tax payable amount with the tax agency.
B. COMPLIANCE PROCEDURES FOR ANNUAL OPERATION REPORT
- By January 30th of each year, every representative office shall submit annual operation status reports using the form stipulated by the Ministry of Industry and Trade to the licensing agency by post.
- Representative offices shall submit reports, documents and explanations for their operation upon the request of competent state regulatory authorities.
- Fail to submit the reports on time, there will be a penalty amount up to 40 million VND and a black record may impact the office license extension process in the future.
C. COMPLIANCE PROCEDURES FOR LABOR MANAGEMENT AND PAYROLL
1/ Compulsory tasks
- Amend labor contracts and annex for new salary agreement in 2021 for each employee.
- Prepare letter of appointment, letter of confirmation of incomes in 2020 for foreign employees.
- Update new procedures for insurance declaration and payment.
- Register and amend payroll system, internal labor regulations, labor agreement, etc. to update new regulations and benefits policies that will be implemented in early 2021.
2/ Other important tasks
- Collect, organize and update employee profile, annual leaves, attendance, overtime and discipline.
- Prepare letter of confirmation of incomes, personal income tax, withholding receipts, etc. for seasonal employees and employees have direct income from abroad.
- Review key performance indicators of each employee and issue letter of confirmation about the allowance, bonus, promotion plan, etc. accordingly.
REPRESENTATIVE OFFICE COMPLIANCE PROCEDURES CHECKLIST
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